A Simple Guide to Paying Off Debt

A Simple Guide to Paying Off Debt

In this guide, we will explain the simple tricks to paying off debt. In our debt repayment series, we will go much more into detail on the different strategies you can use to getting out of debt. But for those that are looking for an easy-to-follow introduction, you’ve come to the right place.

We realise talking about debt and understanding your own debt can be difficult and challenging. Some people will shy away from even knowing how much debt they are in. But this only makes your situation more difficult. This is why we have come up with a simple guide to help you overcome the initially daunting task and easy ways to start chipping away at it.

An image displaying some debt dice

So how do you start paying off debt?

To begin with it’s important to check how much debt you’re really in. Whether that’s credit card, loans, mortgages, student debt, or other forms of credit; write the totals all down and know what you’re working with.

From here it would be a good idea to see how much interest, if any, you are paying on these payments. For example, on a credit card you may have an interest free period, so carrying a balance may not be actually hurting your finances (as long as you’re still paying the minimum repayments). BUT your loan has an 8% interest rate, therefore it is important to try and pay this down as quickly as possible.

After you know the amount, and your interest rates on each individual lines of credit. You can then start thinking what the best plan is for yourself. Below there will be some debt repayment strategies you can choose from. Remember; only you can decide what the best plan is for your situation, but make sure you have all the information before making that decision.

Types of Debt – Personal & Commercial Debt

Debt Repayment Strategies

The series will go into much more detail in these strategies in other blog posts; but here we introduce two well known successful strategies.

1. Debt Snowball: This is where you focus on paying off your smallest debt first (while paying the minimum repayments on your other debts), then when this is paid off, pay your next lowest debt. This is apparently supposed to motivate people to keep paying their debt off as they can see progress much quicker.

2. Debt Avalanche: This is where you focus on paying off your highest interest rate debt first (while paying the minimum repayments on other debts), then the next highest rate, and so on. This is the approach which actually saves you more money because you will pay less interest. However, some people find this strategy difficult to follow because you see progress much slower as you’re tackling bigger debt payments.

DEBT FREE ZONE - FLOWOOD - MS - Watkins & Company CPA

Other debt repayment strategies

Other common strategies to tackle debt can be ‘Debt Consolidation‘. This is where you combine multiple old debts into a new single payment. Crucially, this should only be done if you will have a lower interest rate as this will mean you will have a shorter payoff period. It should also make your payments lower and more manageable. There are multiple ways to consolidate debt into one payment. These include: a personal loan and a balance transfer card. The latter can be a really good way to reduce debt if you can find a long interest free period.

A little tip: If you are thinking of consolidating your debt, make sure you maintain viewing your credit score and do eligibility checkers before applying for a loan. You can find more information on what affects your credit score and how you can improve your credit score by clicking here!

Budgeting: If you are in debt it’s a great idea to actually start budgeting your finances so you know where your money is going. You’d be surprised how many people buy *a coffee here* or *some new clothes there* and not realise that they’ve been constantly spending money. Having a budget can be a really good way to track your expenses which may put you off buying non-essential purchases. Remember: The less you spend the easier it will be to pay off your debts.

If you are in serious problems you can go to nonprofit organisations that are there to help you. These include: Step Change, Citizens Advice and National Debt Line.

The key to debt repayment strategies is firstly, understanding how much debt you’re actually in. But, discipline is also really key. Debt can be really stressful but if you can start making small changes and put a plan together you will see a big end result.

Make sure you subscribe to our series around understanding and managing debt, and you’ll receive researched articles on how you can tackle your debt for good.

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33 Responses

  1. […] mentioned in a previous post, there are different types of debt repayment strategies. In this article, we will be looking at the […]

  2. This is really helpful! I’ve recently paid off a couple of my smaller debts (doing the debt snowball method) and am working towards clearing the last few!

    • 3MoneyTalk Jake says:

      That’s great to hear! Consistency and patience really is everything so keep it up and you’ll get there in no time!


    We’ve managed to pay off a few small debts recently which is great. I try to budget where I can. The main problem is my husband doesn’t so it isn’t easy.

    • 3MoneyTalk Jake says:

      That’s really good Melanie! Budgeting doesn’t have to be difficult, a lot of the time you can save money by making small changes you won’t even notice. We’ll be doing some budgeting idea guides very soon so hopefully they’ll be able to help you out!

  4. Such a great post, especially for what we are going through at the moment and people finding themselves in debt

  5. I always find that I start doing really well paying off a debt and then something goes really wrong – paid off half a credit card and then a leak from upstairs flat into mine lead to a lot of damage which then meant excess payments and so on! Always the way, but some real good advice!

    • Life does sometimes tend to get in the way and throw you off track with things like that! I think trying your best is all you can do – so don’t get too disheartened!

  6. Some great tips here. I am now debt free but it’s taken a good few years.

  7. Jenni says:

    Those are two interesting strategies, and it’s great that each works, I can see the snowball method really helping with motivation. It really is so important to stay on top of money/debts. I keep a very close eye on our budget otherwise it would be too easy to get into debt.

  8. Rhian westbury says:

    I’ve been lucky to not be in debt before but for me if I could I would try and consolidate them as it means there’s just one goal and not loads of separate ones to try and pay off x

  9. This is a helpful post for those who have a lot of debts and don’t know where to start. We have recently paid off some small debts and now working towards settling our mortgage.

    • Great work! Sometimes just starting is the most difficult thing to do, once you’ve got a plan in place and begin to see progress you’ll be feeling much more encouraged!

  10. Valerie says:

    Debt can be quite daunting to tackle, particularly if you have a lot of it. My Mom mentioned recently that when she was younger she paid off one small bill at a time and it was helpful.

    • One step at a time really can be the best way to do it! As long as you have a clear plan and feel motivated, it’s nothing you won’t be able to solve. 🙂

  11. Melanie williams says:

    There is some really sound and sensible advice here for sure. I think it is so important to get on top of debt x

  12. Lynne Harper says:

    What a great write up for anyone who finds themselves in debt and wondering how to get out of it. It took me 4 years and I’m now debt free with an amazing credit score. It can be done

  13. Some excellent tips and advice , we have done a few of these over the years and personally focusing on the smaller ones first feels better as your able to clear them an dit doesn’t very so much with the amount of them you may have, great post.

  14. My debt started to snowball and we was buying things out of catalogues like kids clothes and Christmas, because we didn’t have the money, but then getting more in debt with the interest. I ended up getting an IVA and it’s the best thing I have ever done, and once I free, I will never get in debt again.

  15. This is going to be such a helpful post for so many people right now – me included! I think we are in for some rough times ahead and it is a great idea to get as much as you can in order at the moment.

    • We’re glad to hear you’ve found the post helpful Victoria! We fully agree, and we’re doing our best to help as many people as we can right now get the tips they need.

  16. […] mentioned in a previous post, there are different types of debt repayment strategies. Following on from our looking into […]

  17. Lyanna Soria says:

    Those are some great tips to keep in mind and quite helpful as well. It’s important to be mindful since you can easily fall in debt if you don’t focus.

  18. Like!! Great article post.Really thank you! Really Cool.

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